Problems With Bank Accounts Go Far Beyond Wells Fargo

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Wells Fargo’s recent troubles over its sales practices, which have resulted in $185 million in fines, highlight one of the common complaints customers have about their banks: the mishandling of accounts.

A NerdWallet analysis of more than 64,000 bank-related complaints over four years lodged with the Consumer Financial Protection Bureau found that the opening, closing or management of accounts was the most widespread issue. This problem represented 44.1% of all banking complaints during this period.

In their complaints, which encompassed more than 400 financial institutions, consumers described banks that opened, blocked or closed accounts without notice or explanation; imposed high service fees on inactive accounts; provided misleading information about new accounts; added new charges without warning; and failed to close existing accounts upon request.

Complaints about the opening, closing or management of accounts rose more than 40% in the past 12 months, ending in October. That’s a steeper rate of increase than any other issue. By comparison, within the same period, the number of all banking complaints rose about 30%.

The second most common category of banking complaints had to do with deposits and withdrawals. Consumers reported deposits that were credited late or not at all, checks being damaged during ATM deposits and then processed incorrectly, and employees who would not help customers stop fraudulent withdrawals.

In each of the past four years, these two categories have comprised at least two-thirds of all banking complaints.

Americans lodged almost 20,700 banking complaints with the CFPB between Oct. 1, 2015, and Sept. 30, 2016. During that period, metropolitan statistical areas, or MSAs, with a population over 100,000 had a median estimated complaint rate of 3.82 per 100,000 residents. Some of the highest rates of complaints were in cities with less than 500,000 residents. Leading the list was Trenton, New Jersey, with an estimated rate of almost 23 complaints per 100,000 people; others include Macon, Georgia, and Topeka, Kansas. More populous metro areas such as New York, Miami and Washington, D.C., also had high estimated complaint rates, ranging from 9 to 12 per 100,000 residents.

Year over year, in most of these 25 metro areas, complaint totals have increased. This may indicate a higher number of incidents, wider awareness of the bureau’s complaint portal among consumers or both, according to the CFPB.

Whatever the reason, a few cities have recently seen sizable upswings. In the past year, San Francisco, Las Vegas, and Hartford, Connecticut, have seen spikes in complaints about debit or ATM cards. (Johnstown, Pennsylvania, isn’t included in the charts below because of the lack of data before 2014.)

As for Wells Fargo, the company has had more than its share of CFPB banking complaints. According to data from the Federal Deposit Insurance Corp., in June 2013 the bank’s share of all domestic deposits was about 10%, while its share of banking complaints was around 18%. But the gap has narrowed in the past few years. Since 2013, Wells Fargo’s domestic deposit holdings have remained steady at around 10% while its rate of banking complaints has decreased by one-third. (The data reflect the four 12-month periods leading up to June 30, 2016, and do not take into account complaints that may have been received since the reporting of its $185 million fine in September.)

METHODOLOGY

NerdWallet examined CFPB complaint data, comprising almost 64,200 complaints, from July 1, 2012, to Sept. 30, 2016. Complaint totals were based on ZIP code information included in complaints. Almost 64,200 CFPB records were sorted into metropolitan statistical areas designated by the U.S. Census Bureau. In cases where ZIP code information was incomplete, the geographical assignments were estimates derived from U.S. Postal Service documentation. Population figures for all MSAs were Census Bureau estimates for 2015.

Bank deposit data for periods ending June 30, 2013, June 30, 2014, June 30, 2015, and June 30, 2016, were downloaded from the FDIC website. For each of these four data sets, we added up all domestic deposits belonging to Wells Fargo and then compared each total to that year’s total of domestic deposits held by all banks in the U.S.

To match the FDIC time periods, we used CFPB data for the four 12-month periods ending June 30, 2013, June 30, 2014, June 30, 2015, and June 30, 2016, and counted Wells Fargo complaints as well as all banking complaints. This allowed us to determine Wells Fargo’s share of all banking complaints during those years.

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